We are writing to ask you to join us in sending a letter to Secretary Alex Azar at the Department of Health and Human Services urging action to address the use of fees, including direct and indirect remuneration (DIR) fees, in the Medicare Part D program.

The increasing use of fees in the Medicare program has been a growing concern in recent years. As noted by the Centers for Medicare and Medicaid Services (CMS) in a 2017 Fact Sheet, and more recently in a Medicare Part D proposed rule, the increasing use
of fees is leading to an increase in beneficiary cost-sharing and payments made by Medicare. Not only does the use of such fees impact the Federal government and beneficiaries, but the unpredictable variability in the use of fees provides little visibility
for participating retail pharmacies, particularly for performance-based fees and the goals necessary to achieve specified targets to “earn back” fee amounts.

CMS is taking steps to address this concern. As a part of the proposed rule, CMS included a request for information (RFI) on a potential proposal that would require all pharmacy price concessions, or DIR, be included in the negotiated price. This is the
price that is used to determine a beneficiary’s out-of-pocket costs at the point-of sale.

Our letter urges Secretary Azar to take steps to finalize this proposal and highlights how restructuring pharmacy price concessions as detailed in the RFI could lead to lower out-of-pockets costs for beneficiaries and how greater transparency in the use
of fees will make medicine more accessible, leading to greater adherence and better health outcomes. The letter also urges the Secretary to explore other related policies that promote a quality-driven healthcare system, such as 1) a meaningful and consistent
pharmacy-specific performance-based incentive program calculated separate and apart from the negotiated price, and 2) placing a cap on performance-based fees on a per script basis, thereby limiting the amount of performance fees that can be collected related
to a specific drug to facilitate greater transparency and predictability.